Mongodb, Inc. ((MDB)) has held its Q3 earnings call. Read on for the main highlights of the call.
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MongoDB’s recent earnings call painted a picture of robust growth and strategic foresight. The company reported significant increases in revenue, customer base, and profitability, with Atlas leading the charge. Despite some challenges, particularly in gross margins and AI adoption, MongoDB’s strategic positioning and operational execution suggest a positive outlook.
Accelerating Atlas Growth
Atlas, MongoDB’s flagship product, demonstrated impressive growth, accelerating to a 30% year-over-year increase. This marks a steady rise from 29% in Q2 and 26% in Q1, now accounting for 75% of the company’s total revenue. This growth underscores Atlas’s critical role in MongoDB’s revenue stream.
Record Revenue and Profitability
MongoDB achieved a record total revenue of $628.3 million, marking a 19% year-over-year growth and surpassing the high end of their guidance. The company also delivered a non-GAAP operating income of $123.1 million, translating to a 20% non-GAAP operating margin, highlighting their strong profitability.
Customer Growth
The company ended the quarter with over 62,500 customers, adding 2,600 in the quarter and 8,000 year-to-date. This reflects a 65% growth in customer additions on a year-to-date basis, showcasing MongoDB’s expanding market reach and customer base.
Strong Free Cash Flow
MongoDB reported an operating cash flow of $144 million and a free cash flow of $140 million, a significant increase from the $37 million and $35 million reported in the same period last year. This indicates a strong financial position and effective cash management.
Increased Financial Guidance
MongoDB raised its financial guidance for the fourth quarter and full fiscal year 2026, expecting full-year revenue growth of 21% to 22%. This optimistic outlook reflects the company’s confidence in its growth trajectory and market opportunities.
Expansion in Fortune 100
MongoDB continues to expand its presence in the Fortune 100, now serving more than 70% of these companies. A notable example is a major global insurance provider that has broadly adopted MongoDB, illustrating the company’s strong foothold in large enterprises.
Gross Margin Decline
The gross margin for the third quarter was 74%, down from 77% in the year-ago period. This decline is primarily attributed to Atlas growing as a larger percentage of the overall business, impacting the margin.
Challenges with AI Adoption
While MongoDB is strategically positioned for AI, many AI projects remain in pilot phases, with few AI agents in production that fundamentally transform businesses. This presents a challenge in realizing the full potential of AI-driven growth.
Forward-Looking Guidance
Looking ahead, MongoDB has raised its revenue guidance for the fourth quarter to between $665 million and $670 million, indicating a 21% to 22% year-over-year growth. The company also projects full fiscal year 2026 revenue to be between $2.434 billion and $2.439 billion, emphasizing their continued confidence in both core and AI-driven business opportunities.
In summary, MongoDB’s earnings call reflects a company on a strong growth trajectory, driven by Atlas’s performance and a growing customer base. While challenges remain, particularly in AI adoption and gross margins, the company’s strategic initiatives and financial performance suggest a positive outlook for the future.